Are Marketers Giving Enough Credit to Direct Mail?

Marketers may be too quick to dismiss direct mail. That’s one of the takeaways from a new study by market research company Millward Brown Digital.

In its third annual Getting Digital Right study, Millward Brown Digital asked marketers what makes up their ideal marketing mix. In that mix, marketers allocated 5 percent to direct mail; only events and conferences earned a smaller share (4 percent), while traditional advertising sat at the top (16 percent).

Yet in the same study, marketers said they find it easier to track the ROI of direct mail than the ROI of mobile ads and apps, traditional media, social media, content marketing, events and conferences, and webinars. Spending on direct mail is expected to reach $8.9 billion this year, according to DMA.

Millward Brown Digital says its findings show that half of marketers aren’t confident their organizations have the right media mix in place, resulting in “potentially wasted messages, missed opportunities and lost revenue.”

“Direct mail is one of the most effective types of advertising a business can do,” says Keith Goodman, vice president of Modern Postcard, a direct mail marketing company. “For decades, it has been a cornerstone for customer acquisition and retention, from America’s largest brands to inexperienced startups. Like any other type of marketing, it is critical that it be done correctly to maximize ROI.”

A session at DMA’s upcoming &THEN marketing conference will focus on direct mail. The session, “Direct Mail: The New Fundamentals,” will be led by Goodman.

In terms of ROI, direct mail delivers response rates that “outperform digital channels by a long shot,” according to IWCO Direct, a provider of direct marketing services. In making that statement, IWCO Direct cites the 2015 DMA Response Rate Report, which showed:

Direct mail achieves a 3.7 percent response rate with a house list and a 1 percent response rate with a prospect list. All digital channels combined achieve only a 0.62 percent response.

Cost-per-acquisition for direct mail matches up well against other methods. Direct mail stands at $19, compared with mobile and social media ($16 to $18), paid search ($21 to $30) and internet display ($41 to $50).

The ROI of direct mail is the same as social media (15 percent to 17 percent).

“Businesses today have a committed focus on driving revenue, and direct mail provides one of their most profitable advertising options,” Goodman says. “The idea of doing direct mail is easy, but doing it right requires some expertise.”

Research backed by the U.S. Postal Service and the American Association of Political Consultants found that millennials pay “very close attention” to politically oriented direct mail: Forty percent of millennials reported thoroughly reading political mail, compared with 18 percent of non-millennials. And more broadly, despite their near-obsession with email, texts and social media, 36 percent of American adults under age 30 look forward to checking their mailboxes every day, according to a Gallup poll taken in 2015.

No matter the age of the recipient, direct mail “may be more expensive on a “per piece” basis than digital channels, but it packs a punch that cannot be replicated with a digital channel alone,” IWCO Direct says.

DMA says direct mail and online marketing actually complement each other. While online marketing generally is low-cost and low-impact, print is higher-cost but higher-impact, according to DMA.

“Where online marketing is passive, direct mail is active. Direct mailings are proactive and tactile — demanding that the recipient do something with it,” DMA says. “The better response rates make the return on the investment worthwhile for both retention and acquisition.”

This article is brought to you by &THEN, DMA’s annual event. Click here to join the leaders of the marketing community and explore the science of creativity in Los Angeles, October 16-18. Save over $500 when you register online.